Budget 2024: Will the Old Tax Regime be Discontinued?

Updated on: Aug 6th, 2024

5 min read

Salaried taxpayers didn’t see many positive changes in the last few budgets, except for the optional new tax regime in the Budget 2020, which didn’t find favour. In Budget 2024, the main focus under personal taxation was on promoting the new tax regime. Tax relief measures announced by Finance Minister Nirmala Sitharaman, were mostly focused for the taxpayers opting for the new regime. This shows that the government is encouraging more people to switch to the new regime. But does this call for the end of the old tax regime? No. The old tax regime will continue. Therefore, the taxpayers still have the option to stick with the old one.

Budget 2024 Announcements for New Tax Regime

The standard deduction has been increased from Rs. 50,000 to Rs. 75,000 under the new regime.
The deduction for family pension also has increased from Rs. 15,000 to Rs. 25,000 under the new regime.
The tax slabs have been changed under the new regime because of which a salaried employee in the new tax regime can save up to Rs. 17,500 in taxes. The New Tax Regime slab rate applicable for FY 2024-25 is as follows -

Total Income	Rate of Tax
up to ₹3,00,000	Nil
₹3,00,001- ₹7,00,000	5%
₹7,00,001- ₹10,00,000	10%
₹10,00,001- ₹12,00,000	15%
₹12,00,001- ₹15,00,000	20%
₹15,00,001 and above	30%

What Exemptions and Deductions are Available Under the New Tax Regime?

Particulars	Old Tax Regime	New Tax regime
HRA Exemption	✓	X
Leave Travel Allowance (LTA)	✓	X
Other allowances including food allowance of Rs 50/meal subject to 2 meals a day	✓	X
Standard Deduction (Rs 50,000 under old regime and Rs. 75,000 under new regime)	✓	✓
Entertainment Allowance Deduction and Professional Tax	✓	X
Perquisites for official purposes	✓	✓
Interest on Home Loan u/s 24b on self-occupied or vacant property	✓	X
Interest on Home Loan u/s 24b on let-out property	✓	✓
Deduction u/s 80C	✓	X
Employee's (own) contribution to NPS	✓	X
Employer's (own) contribution to NPS	✓	✓
80D- medical insurance premium	✓	X
Disabled Individual - 80U	✓	X
Interest on education loan	✓	X
Interest on Electric vehicle loan	✓	X
Donation to Political party/trust etc	✓	X
Savings Bank Interest u/s 80TTA and 80TTB	✓	X
Gifts upto Rs 50,000	✓	✓
Exemption on voluntary retirement 10(10C)	✓	✓
Exemption on gratuity u/s 10(10)	✓	✓
Exemption on Leave encashment u/s 10(10AA)	✓	✓
Daily Allowance	✓	✓
Transport Allowance for a specially-abled person	✓	✓
Conveyance Allowance	✓	✓

Deductions and Exemptions available under Old vs New Tax Regime

Also Read
Old vs New Tax Regime
New Tax Regime Deductions Allowed, Exemption List & Benefits
Form 10-IEA: Option to Choose Old Tax Regime
Income Tax Changes From 1st April 2024

Frequently Asked Questions

Will old tax regime be discontinued in future?

In Budget 2023, the Finance Minister announced that new tax regime will now be the default tax regime. It sparked some concerns among taxpayers about the fate of the old tax regime. However, taxpayers should note that the old tax regime is not being discontinued, and they still have the option to opt for the old regime.

Is new tax regime better than old?

In the 2023 Budget, various tax relief measures were introduced to make the new tax regime attractive. Amongst the old and new tax regimes, which one is better will vary depending on individual circumstances. You can use this calculator to find out which regime is more beneficial for you.

Can we switch between old and new tax regime every year?

Taxpayers not having business income can switch between the old and new tax regimes every year. However, taxpayers with business or professional income can switch only once in a lifetime.

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About the Author

Mohammed S Chokhawala

Content Writer

I'm a chartered accountant, well-versed in the ins and outs of income tax, GST, and keeping the books balanced. Numbers are my thing, I can sift through financial statements and tax codes with the best of them. But there's another side to me – a side that thrives on words, not figures. Read more

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